Millions of customers will soon be able to compare current accounts to see if they are getting a good deal from their bank

Millions of customers will soon be able to compare current accounts to see if they are getting a good deal from their bank.

The Government yesterday announced it had agreed how the service will work with the UK’s biggest banks and said it would be up and running by the end of the financial year next March.

Customers will be able to download a year’s worth of current account data in a single file that can be read by online comparison websites.

Sign of the times: Customers will be able to download a year's worth of current account data in a single file that can be read by online comparison websites

The information will be stripped of any personal details to make it more secure, but it will include what shops your money has been spent in, as well as how much you have spent.

This means that if a customer does the majority of their shopping in one supermarket, the online comparison website may flag up an account offered by that supermarket if it offers reward or loyalty points.

More...

Consumer campaigners have complained that bank accounts are too complicated and difficult to compare, particularly when it comes to overdraft charges or interest for those in credit. The City watchdog is already preparing to investigate ‘complex and opaque’ overdraft charges amid concerns that many customers are paying too much.

Speaking at a British Bankers’ Association conference in London, economic secretary to the Treasury Andrea Leadsom said: ‘This initiative has the potential to make a real difference to customers and competition.

‘By helping customers get a much better understanding – for the first time – of how they are spending their money, and which is the best product for them.’

The move was welcomed last night by consumer campaigners.

James Daley, managing director of Fairer Finance said: ‘This will help debunk some of the myths about bank charges.

‘Currently the only way people can see if they are getting a good deal is by doing the maths themselves, and most people are not up for that.’

The initiative has the potential to diminish the role of commercial price comparison websites, which cannot tailor recommendations in the same way that it will be able to.

However, Rob Saunders, head of money at Comparethemarket.com, said it will be good news for customers if if encourages switching.

He said: 'The new infrastructure proposed by the Government must make clear the benefits of any account on offer, so that consumers can make an informed choice about what’s right for them. This scheme will highlight the importance of switching, and in the long term will provide a better deal for consumers.'